694 Boerschig v. Trans-Pecos Pipeline, L.L.C., 872 F.3d 701 (5th Cir. 2017)

Thursday, August 23rd, 2018

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.

Boerschig v. Trans-Pecos Pipeline, L.L.C., 872 F.3d 701 (5th Cir. 2017) held that Texas’ eminent domain regime is not an unconstitutional delegation of power to a private party violating the private nondelegation doctrine. A Pipeline Company building a pipeline across Texas to Mexico initiated condemnation proceedings for a right-of-way across Rancher’s Texas land. Rancher sought injunctive relief from condemnation proceedings based on the private nondelegation doctrine.

“A gas or electric corporation has the right and power to enter on, condemn, and appropriate the land, right-of-way, easement, or other property of any person or corporation.” “[C]ourts have determined that a corporation operating a gas pipeline has the power of eminent domain if it devotes its private property and resources to public service and allows itself to be publicly regulated.” The utility must determine that the taking is necessary to further what both the Texas and federal constitutions require, a public purpose, but if a judicial review is invoked, this necessity determination is “conclusive, absent fraud, bad faith, abuse of discretion, or arbitrary or capricious action.”

The private nondelegation doctrine is based on the Due Process Clause. It essentially prevents “governments from delegating too much power to private persons.” The court summarized three U.S. Supreme Court cases from the early 1900’s which all held certain statutes unconstitutional for violating the doctrine. However, the statutes in those cases provided no guidance for decision making and no provision for judicial review. Here, the court reasoned that because Texas imposes the necessity requirement of “public use” and this determination is subject to deferential judicial review, substantive due process is satisfied under the private nondelegation doctrine. Therefore, Texas’ condemnation scheme does not violate the doctrine.

The significance of this case is the holding that Texas’ condemnation scheme does not violate the private nondelegation doctrine, because its public necessity standard is subject to judicial review and private parties do not have an unrestrained ability to condemn land.